Price Hike Without Proper Justification Arbitrary : NCDRC Holds Ghaziabad Development Authority Liable For Deficiency In Service

The National Consumer Disputes Redressal Commission, presided by AVM J. Rajendra, held that a substantial price hike by the developer without a proper justification amounts as deficiency in service.

Brief Facts of the Case

The complainant was allotted a Duplex House under the Shastri Nagar residential scheme by the Ghaziabad Development Authority/ developer, with a cost of Rs. 4,26,022, fully paid. Possession was handed over late, without basic facilities like sewer, water, electricity, roads, or parks. Despite the complainant making full payment, the developer later demanded an additional ₹5,25,603, which the complainant disputed. Claiming service deficiencies, the complainant filed a case with the district commission, seeking to cancel the price hike, demand interest for delay, complete the freehold registry at the original price, and get compensation for repairs and other costs. The district commission ruled in favor of the complainant, ordering the developer to complete the registry at the original price within two months, along with ₹1,000 for litigation costs. Dissatisfied, the developer appealed to the State Commission of Uttar Pradesh, which modified the district commission's order. The State Commission directed the complainant to pay 10% of the property's estimated cost and to settle any due interest on installment delays. Aggrieved, the developer filed a revision petition before the National Commission.

Contentions of the Developer

The developer argued that the estimated cost of the house was Rs. 4,26,022, but the final cost after construction came to Rs. 5,25,603. The complainant took possession of the house but left an unpaid balance of Rs. 2,16,584, which caused a delay in the transfer. The developer argued that the delay was the complainant's fault and they were not entitled to any interest or extra costs from them.

Observations by the National Commission

The National Commission observed that while the allotment letter under the 'Instant Allotment Scheme' mentioned Rs. 4,26,022 as the estimated cost of the property, the developer later demanded an additional Rs. 99,581, citing a revised final cost. The commission highlighted that though the developer argued that the initial amount was just an estimate, the delay in finalizing and informing the complainant of the actual cost was not justified, and no proof was given for the price increase. The Commission found that a significant hike in the cost without a proper explanation can be unfair/unjust. However, since the complainant agreed to pay a 10% increase, the State Commission's decision was upheld. Hence, the National Commission dismissed the revision petition.

Case Title: Ghaziabad Development Authority Vs. Suresh Chandra Sharma

Case Number: R.P. No. 788/2020